Nasdaq Sees Profit Boost from Financial Technology Demand
Strong Q4 Performance Driven by Compliance and Financial Crime Prevention Solutions
Nasdaq’s fourth-quarter profit surged, thanks to increased demand for its financial technology products. The exchange operator’s expansion beyond its core trading and listing activities has paid off, with revenue from its financial technology business rising nearly 10% in the quarter.
Financial Technology Unit Falls Short of Expectations
Although the $438 million revenue from the financial technology unit was impressive, it marginally missed analysts’ estimates of $441.2 million. This shortfall weighed on the company’s share price, which had risen 33% in 2024.
Annualized Recurring Revenue Key to Growth
According to Owen Lau, a senior analyst at Oppenheimer & Co., “Fintech was driving the growth, but it was actually below expectation for the quarter.” Lau emphasized that annualized recurring revenue is the key metric driving the stock.
CEO Adena Friedman Confident in 2025 Growth
Adena Friedman, Nasdaq’s CEO, expressed optimism about the company’s prospects in 2025, citing a solid economic backdrop. With U.S. consumer spending and low unemployment supporting GDP growth, Friedman believes investors will feel more confident about deploying capital.
Global Economy Expected to Grow
Friedman noted that inflation and interest rates are settling into a more predictable state, contributing to a positive business environment. She expects the global economy to grow, driven by strength in the U.S. and other parts of the world, including South Asia.
IPO Market Sees Resurgence
The U.S. IPO market experienced a resurgence during the reported quarter, thanks to hopes of a soft landing for the U.S. economy, strong equity markets, and expectations of a friendlier regulatory environment. Nasdaq’s total listed companies rose 0.7% to 4,075 as of Dec. 31, 2024, resulting in a 1.6% increase in the company’s data and listing services revenue.
Big Names List on Nasdaq
Notable companies like ServiceTitan and WeRide listed their shares on Nasdaq during the quarter. Friedman expects more companies to list on public markets, setting up a strong second half of 2025.
Net Profit and Revenue Beat Expectations
Nasdaq’s net profit attributable to the company, on an adjusted basis, came in at $438 million, or 76 cents per share, beating analysts’ expectations of 75 cents. The company reported net revenue of $1.23 billion, up from $1.12 billion.
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